US President Barack Obama called on Iran's government to stop "violent and unjust" action against its own people, in his sharpest challenge yet to top leader on a day of bloodshed and violence.

US President Barack Obama called on Iran's government on Saturday to stop "violent and unjust" action against its own people, in his sharpest challenge yet to top leader on a day of bloodshed and violence.

Obama issued a written statement stiffening his position on the turmoil, after a week seeking to find the right tone to recognise unprecedented protests in Iran while avoiding being seen to meddle in Iranian affairs.

"We call on the Iranian government to stop all violent and unjust actions against its own people," Obama said, as protestors clashed in defiance of an order from supreme leader Ayatollah Ali Khamenei for an end to protests.

"The Iranian government must understand that the world is watching. We mourn each and every innocent life that is lost," Obama said.

"The universal rights to assembly and free speech must be respected, and the United States stands with all who seek to exercise those rights," said Obama.

Obama also referenced his speech to the Muslim world in Cairo earlier this month, when he warned Iran's leaders "suppressing ideas never succeeds in making them go away."

The president also stressed that if Iran's leadership wants the respect of the international community "it must respect the dignity of its own people and govern through consent, not coercion."

The president's remarks followed a week of careful statements on the crisis which erupted following President Mahmoud Ahmadinejad's disputed election victory over candidates including Mir Hossein Mousavi.

An administration official said that Obama "repeatedly met" in the White House Saturday with senior advisors to discuss the situation in Iran.

The US president also quoted Martin Luther King Jr in his statement, repeating the slain US civil rights leader's phrase that "the arc of the moral universe is long, but it bends toward justice."I believe that. The international community believes that. And right now, we are bearing witness to the Iranian peoples' belief in that truth, and we will continue to bear witness," Obama said.

Saturday's statement was issued as hundreds of protesters gathered in Los Angeles, New York and outside the White House to show their support for Iran's opposition.

Many protestors wore green, a color that has become symbolic of the campaign of Mir Hossein Mousavi, the opposition leader who claims he won the vote.